The Best Measure of the Performance of the Manager of a Profit

question 11

Multiple Choice

The best measure of the performance of the manager of a profit center is the

• A) rate of return on investment.
• B) success in meeting budgeted goals for controllable costs.
• C) amount of controllable margin generated by the profit center.
• D) amount of contribution margin generated by the profit center.

---

Definitions:

Financial Statements

Documents that report the financial activities and conditions of a business or entity, including the balance sheet, income statement, and cash flow statement.

Net Assets

The total assets of a company minus its total liabilities, representing shareholders' equity or owner's equity.

Endowment Contributions

Donations made to an institution, often with the stipulation that the principal remains intact while the income or interest is used for a specific purpose.

Capital Assets

Long-term assets acquired or invested in for the purpose of generating revenue over an extended period.